With the Presidential elections coming up next year, we should hear a lot about Social Security reform over the next 16 months or so.
This isn’t a new topic by any means, politicians have been discussing ways to either improve, expand or privatize Social Security for years.
This election is a little different though, in that Medicare has also come into the spotlight. With Medicare turning 50 recently, Medicare reform has joined the list of hot topics for the upcoming debates.
The 2016 presidential election kicked off last evening in Cleveland with the first Republican candidate debate.
Candidates debating last night included Jeb Bush, Scott Walker, Mike Huckabee, Ben Carson, Ted Cruz, Marco Rubio, Rand Paul, Chris Christie, John Kasich, and of course, the very controversial and outspoken Donald Trump.
Seven other candidates, including Rick Perry and Bobby Jindal, did not qualify for the main debate and squared off during pre-debate events.
Some of the highlights from last night’s debate include:
Donald Trump says we have people in Washington who don’t know what they are doing regarding foreign policy, especially Iran.
Ted Cruz: Russia and China are committing cyber attacks on America. The policy of leading from behind not working.
Ben Carson: We have weakened our military so much it has affected our military policy. We need to shore up military.
Scott Walker: Reinstate missile defense, militarily support Poland, send weapons to Ukraine.
Mike Huckabee: The military is not a social experiment. Does not support paying for gender reassignent surgery for military personnel.
Rand Paul: I don’t want my marriage or my guns to be registered in Washington. The government should not impress its opinion on the church.
Scott Walker: On racial issues, we need to make sure law enforcement is treated properly.
Marco Rubio: All human life must be protected at every stage of development. Says history will call us barbarians for killing babies.
Marco Rubio: Even out tax code for small businesses. Limits regulations on the economy. Repeal and replace Obamacare. Repeal Dodd-Frank Act.
Chris Christie: Entitlements makes up over 70 percent of the federal budget. We need to deal with this problem.
Mike Huckabee: Congress should cut their own retirement before they cut Social Security.
Christie: He’s not wrong, but the problem is stealing from Social Security has already happened. We need to deal with the problem.
Huckabee: The Fair Tax will fundamentally change the system.
Jeb Bush: Fix a convoluted tax code. Get rid of Obamacare. Embrace XL Pipeline. Via baynews9.com
As you can see, Social Security wasn’t a main theme in last night’s debate. Any suggestions to cut or reform Social Security can alienate senior voters so presidential candidates will generally approach this topic cautiously. However, politicians can’t ignore Social Security forever.
As you can see from the following articles, even though the most recent Trustee’s report was an improvement over previous reports, the financial health of Social Security is still a concern.
Trustees’ message is clear: Reform Social Security now | Washington Examiner
The 11 million beneficiaries of the Social Security disability program may have been hoping for good news Wednesday when the Social Security and Medicare trustees released their annual report on the program’s finances. But they didn’t get any.
Instead, beneficiaries learned that nothing has improved in the past year and that in roughly 16 months they’ll all have their benefits automatically cut by 19 percent.
Time for reform is running out, and yet Congress continues to do nothing to fix the disability program. It’s unclear how Republicans will reach a compromise that President Obama would be willing to sign.
To emphasize the importance of taking action as soon as possible, the trustees began their annual summary by calling for reform. “Social Security’s Disability Insurance (DI) Trust Fund now faces an urgent threat of reserve depletion, requiring prompt corrective action by lawmakers if sudden reductions or interruptions in benefit payments are to be avoided,” the six trustees wrote. “Beyond DI, Social Security as a whole as well as Medicare cannot sustain projected long-run program costs under currently scheduled financing. Lawmakers should take action sooner rather than later to address these structural shortfalls, so that the uncertainty now facing disability beneficiaries will not eventually be experienced by other programs’ participants, and so that a broader range of solutions can be considered and more time will be available to phase in changes while giving the public adequate time to prepare. Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits.”
The message from the trustees is clear: Fix Social Security now.
It seems unlikely Congress will take any action before members leave for August recess, but Social Security reform needs to be a top priority when they return in September.
Social Security’s retirement trust fund is now projected to be depleted in 2035, one year later than trustees predicted last year. At depletion, retirees would see their benefits automatically cut by 23 percent.
“I fear the slight improvement in the insolvency date for Social Security’s combined trust fund will give law makers and the public a false sense that the program’s financial problems are anything less than urgent — that reform can continue to be put off,” said Jason Fichtner, a Mercatus Center senior research fellow and former deputy commissioner of the Social Security Administration. “Such a misunderstanding would lead to grave consequences for beneficiaries of both the disability and retirement programs. The delay in dealing with the needed structural and financial problems of the DI trust fund should be a wake up call for those concerned with the OASI retirement trust fund — delaying meaningful reforms only limits the options available.” Via washingtonexaminer.com
Most of the reform discussions so far have centered around retirement benefits, but recipients of disability benefits should be more concerned, as the trust fund allocated to disability benefits is expected to run out of money in 2016. Here are some of the proposals from current presidential candidates:
Presidential candidates can’t ignore Social Security
By Mary Beth Franklin
The clock is ticking for the Social Security Disability Insurance Trust Fund. Unless Congress intervenes, the trust fund will run dry in late 2016 — just about the time Americans will be electing a new president.
Without action, the 11 million people with disabilities who rely on Social Security will see their benefits cut by 20% because the portion of payroll taxes that fund those monthly payments will be insufficient to pay all of the promised benefits.
“Social Security’s Disability Insurance Trust Fund now faces an urgent threat of reserve depletion requiring prompt corrective action by lawmakers if sudden reductions or interruption in the benefits payments are to be avoided,” the Social Security and Medicare trustees warned in their recently released 2015 report.
It is time for the crowded field of presidential candidates to weigh in on this important issue. And while they are at it, they may want to discuss the long-range financing problems of the entire Social Security system that includes retirement and survivor benefits for 48 million workers and their families.
Easier said than done, of course. Social Security has long been called the “third rail of politics” — touch it and you die. But politicians can’t keep ignoring the fate of one of the most popular government programs in history, one that is increasingly important to retirement security as traditional pensions disappear and Americans live longer than ever.
Just ask New Jersey Governor Chris Christie. He was lambasted for dipping his toe into the icy waters of the Social Security debate during a campaign swing through New Hampshire in April.
Mr. Christie, who is trailing near the bottom of the Republican field of candidates, called for means testing Social Security by reducing benefits for future retirees with incomes over $80,000 and eliminating benefits for those with incomes topping $200,000. He also called for gradually raising the full retirement age from 67 to 69.
Although his proposed solutions may be unpopular, you have to admit that it took guts to broach such a touchy subject. Just imagine what Donald Trump, currently leading the GOP field of candidates, could do if he shifted his focus and inflammatory language from immigration to Social Security reform. It certainly would be interesting.
Earlier this year, former Florida governor Jeb Bush suggested there should be no changes in Social Security benefits for current retirees. But the one-time Republican front-runner added: “Your children and grandchildren are not going to get the benefits that they believe they are going to get.”
Back in 2013, before he threw his hat in the Republican presidential ring, Senator Ted Cruz of Texas expressed a similar sentiment. “I think it should be a bipartisan priority to strengthen Social Security and Medicare to preserve the benefits for existing seniors and to enact fundamental reform to ensure that those programs remain strong and vital for generations to come.” Oddly conciliatory words from the firebrand of the conservative Tea Party.
Kentucky Senator Rand Paul, another Tea Party darling, co-sponsored a bill in 2011 that called for increasing the Social Security full retirement age to 70 by 2032 and gradually increasing the early retirement age from 62 to 64 by 2028.
On the Democratic side, Hillary Clinton has championed raising incomes for the middle class while remaining silent on retirement security and Social Security reform. But during her 2008 presidential campaign, Ms. Clinton said if she were elected she would appoint a bipartisan commission to make recommendations for a long-term fix and would refrain from discussing specific proposals until the commission offered its recommendations.
Democratic challenger Bernie Sanders of Vermont is adamant about protecting Social Security for current and future retirees. He sponsored bills in 2011 and 2013 that would nearly double the current taxable wage base to $250,000, significantly boosting payroll contributions to finance the Social Security trust funds and eliminating most of the long-term financing problems, albeit with a very one-sided solution.
But on the first day of the new Congress earlier this year, the Republican-controlled House adopted a procedural rule that forbids the House from approving any financial fix to the Social Security Disability Insurance program unless it is accompanied by broader Social Security reforms.
That means the stage is set for a Social Security showdown during a presidential election year. Don’t you think the public deserves some answers from the candidates? After all, whoever wins the election probably will have to deal with the immediate Social Security disability crisis and possibly take steps to begin addressing the long-term financing of the overall program. We’re listening. Via investmentnews.com
In addition to Social Security reform, candidates have also been addressing reform in Medicare. Jeb Bush received quite a bit of heat after his suggestion that Medicare also needed to be reformed:
Bush, after phase out comment, says Medicare needs reform | OnPolitics
By David Jackson July 23, 2015 4:51 pm ET Follow @djusatoday
Jeb Bush, under fire from Democrats for saying he would “phase out” Medicare, said Thursday the program has to be reformed because of unsustainable costs in the long run.
“It’s an actuarially unsound health care system,” Bush told the crowd at a town hall in New Hampshire, adding that “$50 trillion dollars of debt has been accrued and if we do nothing, that’s the burden that we’re going to place on your children and grandchildren.”
Bush spoke a day after making Medicare comments at another town hall: “We need to figure out a way to phase out this program for others and move to a new system that allows them to have something — because they’re not going to have anything.”
Democrats pounced on the “phase out” comment, saying Bush wants to gut the old age health insurance program that has been around for half a century.
Maybe Bush “can afford to get by without Medicare,” but millions of future retirees “count on it for access to quality, affordable health care,” said Rep. Debbie Wasserman Schultz, D-Fla., chairwoman of the Democratic National Committee. “I am sick and tired of Republicans who say that the only way to save Medicare is to destroy it.”
A critical questioner confronted Bush on Thursday, asking him at one point, “Why are you always attacking the seniors?”
In his reply, Bush said current and immediate Medicare recipients should not affected by reform plans.
“The people that are receiving these benefits, I don’t think that we should touch that,” Bush said. “But your children and grandchildren are not going to get the benefits that they believe they’re going to get … because the amount of money put in compared to the amount of money that the system costs is wrong.” Via onpolitics.usatoday.com
Finally, you may have been hearing the term “entitlement” a lot lately. According to the Oxford Dictionaries, entitlement is defined as “the fact of having a right to something”. Social Security benefits are paid into by workers, so workers are “entitled” to those benefits. From that point of view, it’s understandable that people are upset about any reform that would reduce or eliminate benefits that they are entitled to.
However, certain aspects of Social Security (SSI for example) are more of a welfare program. Beneficiaries receiving these benefits didn’t necessarily pay into the system to receive those benefits. Therefore, those are not considered an entitlement. Also, some politicians are arguing that the benefits paid out to Social Security recipients far outweigh the amount paid in.
Whatever your opinion is, the next 16 months should be very interesting!